METI April Data: MLCC Bottoming Out and Recovering, Memory Strong; Reiterate Overweight on Murata/Taiyo Yuden
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METI April Data: MLCC Bottoming Out and Recovering, Memory Strong; Reiterate Overweight on Murata/Taiyo Yuden
Japan's April electronic components production was in line with seasonal patterns, with passive components (MLCC) showing signs of bottoming out; semiconductors overall were weak but memory surged. The institution reiterates Murata Manufacturing and Taiyo Yuden as top picks.
- April electronic components production was in line with seasonal norms, with passive components outperforming the broader market, driven mainly by MLCC.
- MLCC output increased 11% month-over-month, with production value up 12%; although no clear upward trend has emerged, bottoming-out signals have appeared.
- Semiconductors overall were below seasonal norms, but memory production value surged 277% year-over-year, showing strong performance.
- ABF substrates (rigid module substrates) declined month-over-month in April but maintained an upward trend, benefiting Ibiden.
- The institution prefers to reference Ministry of Finance trade data rather than METI production data to assess MLCC business conditions.
- Reiterate Murata Manufacturing (6981.T) and Taiyo Yuden (6976.T) as top picks in the electronic components sector.
Report interpretation
Overview
This report interprets the April 2026 electronic components and semiconductor production statistics released by Japan's Ministry of Economy, Trade and Industry (METI). The core conclusion shows that electronic components overall performed in line with the seasonal patterns of the past 20 years, with passive components (particularly MLCC) outperforming seasonal norms and showing signs of bottoming out. The semiconductor sector overall was below seasonal norms, but memory was an exception, maintaining strong growth. Based on this, JPMorgan reiterates Murata Manufacturing and Taiyo Yuden as top picks in the electronic components sector, and notes that the upward trend in ABF substrates has positive implications for Ibiden.
Core views
Passive Components and MLCC Bottoming Out and Recovering: April passive component production value fell 10% year-over-year but rose 5% month-over-month, outperforming seasonal norms. MLCC was the main growth driver, with output increasing 11% month-over-month and production value (in USD) rising 12%, while average selling price (ASP) edged up 1%. Although April data did not show a clear upward trend, bottoming-out signs appeared in March and April, and the institution looks forward to performance from May onward. Resistors also maintained a gradually rising trend. Semiconductors Diverge Significantly, Memory Stands Alone: Overall semiconductor production value was below seasonal norms. Discrete semiconductors, MCUs, and logic ICs all declined year-over-year and month-over-month. However, memory performance was extremely strong, with production value surging 277% year-over-year and 7% month-over-month, becoming the only bright spot in the semiconductor sector. ABF Substrates Short-Term Correction but Trend Remains Upward: Rigid module substrates, including ABF substrates and FC-BGA, saw production value rise 9% year-over-year but fall 15% month-over-month. This is viewed as a reactive correction following strong production in March, with the overall upward trend maintained, which is positive for Ibiden. Data Source Preference: Since December 2025, METI production data for MLCC has differed significantly from Ministry of Finance (MoF) trade data, particularly with production value below export value. Given the ambiguity in METI data standards, while MoF data shows growth in both export value and USD-denominated average unit prices, the institution places greater emphasis on Ministry of Finance trade data in its analysis.
Analysis framework
The institution employs 'seasonal adjustment analysis' as its core framework, comparing monthly data against historical seasonal norms over the past 20 years to eliminate seasonal distortions and judge true changes in industry business conditions. At the same time, it combines with the 'volume-price decomposition' method to deeply analyze changes in output, production value, and average selling price (ASP) to identify whether demand recovery is driven by volume or price. Additionally, the report applies 'multi-data source cross-validation' logic, comparing differences between METI production data and Ministry of Finance trade data, and by weighing data source reliability (such as noting METI standard ambiguity), selects more reliable indicators to refine judgments on sub-sectors (such as MLCC).
Methodology notes
Decomposing production value changes into output changes and average selling price (ASP) changes to determine the source of growth momentum.
The report decomposes MLCC output (+11%) and production value (+12%), finding that ASP increased slightly by 1%, indicating that the current recovery is primarily driven by demand volume recovery rather than price increases, which helps determine that the industry is in the early restocking phase after inventory destocking ends.
Seasonal Norm Comparison Analysis
Comparing monthly data with historical average levels for the same period over the past 20 years (seasonal norms) to eliminate seasonal fluctuations, thereby more accurately identifying whether an industry is truly outperforming or underperforming expectations.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Murata Manufacturing (6981.T)Beneficiary: MLCC leader, directly benefiting from MLCC output recovery and bottoming-out signals.
- Strengths
- Leading MLCC market share, benefiting from industry bottoming-out rebound.
- Comparison
- Together with Taiyo Yuden as the institution's top picks, both rated Overweight.
- Taiyo Yuden (6976.T)Beneficiary: Major passive components manufacturer, benefiting from the sector's overall outperformance versus seasonal norms.
- Strengths
- Competitive advantages in the passive components field.
- Comparison
- Together with Murata Manufacturing as the institution's top picks, both rated Overweight.
- Ibiden (4062.T)Beneficiary: Major ABF substrate supplier, benefiting from the maintained upward trend in rigid module substrates.
- Strengths
- ABF substrate trend is upward, with positive implications.
- Weaknesses
- April production value saw a 15% reactive month-over-month correction.
Key data
- Passive Component Production Value YoY/MoM-10% / +5%Outperformed seasonal norms
- MLCC Output MoM+11%Showing recovery signs
- MLCC Production Value MoM (USD)+12%Primarily driven by volume increase
- Memory Production Value YoY+277%The only strong sub-sector in semiconductors
- Rigid Module Substrate Production Value MoM-15%Reactive correction, but +9% YoY
- MCU Production Value YoY-30%Weak performance
Impact & implications
For Murata Manufacturing and Taiyo Yuden: As leaders in MLCC and passive components, both companies directly benefit from the recovery in MLCC output and bottoming-out signals. The institution reiterates its 'Overweight' rating, believing their performance will improve with industry recovery. For Ibiden: ABF substrates maintain an upward trend, and despite the month-over-month correction in April, the long-term demand logic remains unchanged, providing positive support. For semiconductor manufacturers: Except for memory manufacturers, others such as MCU and logic IC manufacturers may continue to face weak demand pressure, requiring vigilance against earnings downside risks.
Risks
- METI production data standards contain ambiguities, which may deviate from actual business conditions.
- MLCC production value has not yet shown a clear upward trend, and the sustainability of recovery remains to be observed.
- Semiconductors overall are weak except for memory, which may drag down related company performance.
What to watch
- MLCC production data from May onward to verify the sustainability of the bottoming-out recovery.
- Changes in MLCC export value and average unit price in Ministry of Finance (MoF) trade data.
- Subsequent monthly production value changes for ABF substrates to confirm whether the upward trend is stable.